Definitive Healthcare Corp: Hold Rating Amid Positive Developments and Market Challenges

In a report released today, Craig Hettenbach from Morgan Stanley maintained a Hold rating on Definitive Healthcare Corp (DH – Research Report), with a price target of $5.00.

Craig Hettenbach has given his Hold rating due to a combination of factors that reflect both positive developments and ongoing challenges for Definitive Healthcare Corp. The company reported a strong first quarter, surpassing revenue and EBITDA expectations, which indicates that recent organizational changes are beginning to take effect. However, despite these improvements, the life sciences sector is currently facing several obstacles, such as difficulties in biotech funding and uncertainties related to FDA changes and tariffs, which could slow down the company’s recovery pace.
While the company has shown signs of stabilization, such as steady renewal rates and an increase in new customer activity, there are still concerns regarding the overall market environment. The decline in total customer count and enterprise customers, along with flat current revenue performance obligations, suggests that the company is not yet out of the woods. Additionally, although management remains confident in meeting full-year financial targets, the broader economic uncertainties present a risk that cannot be ignored. These mixed signals contribute to the decision to maintain a Hold rating.